Hospitality and retail penalty rates have been cut – here is what you need to know
You’ve probably heard the news, but in case you haven’t, the Fair Work Commission decided to cut a percentage of Sunday and public holiday penalty rates this week in a result that will directly affect workers, businesses and consumers in the retail, hospitality and fast food sector. If you aren’t up to date on the issue or can’t keep up with the flood of information relating to the cuts, here is everything you need to know.
On Thursday February 22, the Fair Work Commission announced that it would be slashing Sunday and public holiday rates by an estimated 25 to 50 percent to bring them in line with Saturday penalty rates. The ruling has come after the Fair Work Commission’s assessment that the services provided by hospitality, entertainment, retail, restaurants and cafe industries were less demand responsive – or had a higher level of disutility – than other industries and that workers in these sectors were more likely to work on weekends than in other areas. The report also states that existing penalty rates lower staffing levels and restrict the type and range of services provided to the community.
The resulting cuts are as follows:
Hospitality Sunday rates
Full-time and part-time: cut from 175 percent to 150 percent
Casuals: remain at 175 percent
Hospitality public holiday rates
Full-time and part-time: cut from 250 to 225 percent
Casuals: cut from 275 to 250 percent
Retail Sunday rates
Full-time and part-time: cut from 200 percent to 150 percent
Casual: cut from 200 to 175 percent
Retail public holiday rates
Full-time and part-time: cut from 250 percent to 225 percent
Casual: cut from 275 to 250 percent
Other cuts for fast food and pharmacy award schemes have also been introduced.
Reaction to the ruling has been mixed, with many workers in these industries claiming that they rely on penalty rates to compensate for a relatively low wage. The ACTU has estimated that the decision will result in a loss of approximately $6000 per year for low-paid workers. There is also talk that the decrease won’t do anything to reduce public holiday surcharges, as holiday pay will still be well above the regular threshold even after the cuts. Employers in these industries have been pushing for the change, claiming that penalty rates make it expensive to operate on days they apply. The Australian Chamber of Commerce and Industry has also released a statement saying that the removal of penalty rates would give thousands of small and family-run businesses more capacity to hire new staff and give more hours to existing staff. Several businesses have opposed the decision, announcing that they would be maintaining Sunday and public holiday rates, while petitions have been started to overturn the decision.
Although no transitional date has been set for the commencement of the Sunday rate change, changes for public holiday rates will begin on July 1, while early and late-night work loadings in restaurant and fast-food awards will take affect later this month. To read the summary of the Fair Work Commission’s findings, click here.
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